2025 Predictions from the Condensing the Cloud Team

We spoke with members of the Condensing the Cloud team here at Battery Ventures to gather some tech predictions for the coming year. Our investors and operational experts see lots of change on the horizon—much of it related to AI—in areas including identity management, document ingestion, audio interfaces, post-production software development and more. We’ve also got predictions about IPOs in India and the breakneck growth of certain software and data companies—in addition to intriguing ideas about how AI and other technologies may reshape talent acquisition and sales-and-marketing strategy. Here’s a sample of what we expect next year.

What are your 2025 predictions? Let us know here.

I. AI-Enhanced Productivity and Integration

“AI won't replace knowledge workers but will make those with deep subject matter expertise and contextual understanding significantly more productive, potentially widening the existing skill gap.” — Danel Dayan, Principal (Bio; LinkedIn)

“Top performers will become even more effective, with AI acting as a force multiplier. This will change the nature of skilled labor and access to such jobs, rather than eliminating them entirely.”

“Document ingestion and IT integration will emerge as two of the most valuable gen-AI enterprise use cases.” — Marcus Ryu, Partner (Bio; LinkedIn)

“AI-powered customer service is arguably getting the most attention from enterprises, but gen AI is also addressing two of the most unglamorous things they have to do: (1) transform unstructured, document-based information into structured, normalized formats suitable for both human decision-making and ingestion by systems; and (2) getting disparate systems to communicate to each other. Those two problems have in common a "semantic" challenge — namely, understanding the meaning of information in one context and translating it for the appropriate receiver. LLMs can overcome that challenge by allowing natural language mappings of data from one context to another — potentially saving vast amounts of clerical and technical human effort.”

“AI systems will evolve from copilots to autopilots as AI-powered software companies automate human labor and services workflows.” — Jason Mendel, Vice President (Bio; LinkedIn)

“LLMs have demonstrated that AI can solve complex problems requiring human-like reasoning and handle workflows involving large volumes of unstructured data and information.”

“By the end of 2025, AI-powered, passive meeting assistants that now transcribe and take notes will evolve into active participants that you can converse with in real time on platforms like Zoom.” — Brandon Gleklen, Principal (Bio; LinkedIn)

“These AI collaborators will seamlessly pull real-time insights from systems of record like Salesforce, Jira and internal knowledge bases, and even engage in debates. This development will transform AI from a side tool into a fully integrated and indispensable member of the team, reshaping how businesses collaborate and make decisions.”

“AI is here to stay in the sales tech stack, with implications for seller roles.” — Bill Binch, Operating Partner (Bio; LinkedIn)

“In 2024, AI in sales tech got traction in the upfront portion of the seller’s job, i.e. identifying personas/ICP, building lists, crafting the message and launching new sequences. In 2025, I predict more focus in AI sales tech for the back-office portion of the role – listening to the call, building the follow up content, updating the CRM, creating the forecast, creating the quote – essentially, simplifying the administrative part of the sales role.

Also, the SDR role is fading, specifically for inbound leads. Classic SaaS ratios of three reps to one SDR will widen, growing to 5:1 to 7:1.”

“Verification and security will become top priorities for enterprises as AI authors more code and software.” — Danel Dayan, Principal (Bio; LinkedIn)

“The security industry will shift from detection and response to detection and verification, with response and remediation becoming secondary steps in security workflows.”

“Organizations will continue to adopt AI tools to optimize the recruiting process, especially for interview note-taking, sourcing and screening/assessment of candidates.” — Jenny Kang, Talent Partner (Bio; LinkedIn)

“Time will tell if these tools improve decision-making long term and lead to longer candidate tenures, but more companies will experiment so they aren’t left behind. Talent’s interest in AI companies at all stages will persist. I predict that we will see increased hiring in 2025, especially across go-to-market, engineering and product roles.”

“By the end of 2025, AI-powered audio interfaces are likely to see widespread adoption as a layer on top of traditional SaaS applications.” — Brandon Gleklen, Principal (Bio; LinkedIn)

“We are already seeing some interesting proofs-of-concept - e.g., an AI voice chat to help analyze at CT scan or help edit a video in Adobe Premier Pro. Implementing voice chat has the nice benefit of not taking up screen real estate and allowing users to stay fully immersed in an application, and I think that users will gravitate to this intuitive interaction model.”

“In 2025, the rise of Agentic AI will begin to redefine the way businesses operate, moving beyond traditional human-led workflows into an era where autonomous AI agents play a pivotal role.” — Evan Witte, Director, Business Development (Bio; LinkedIn)

“These agents, capable of decision-making and action without constant human input, will effectively double—or even triple—the workforce in some organizations in the coming decade. For executives, this means managing a blended workforce of humans and AI agents, each complementing the other's strengths. These AI agents won’t just follow instructions; they’ll proactively identify opportunities, solve problems and even collaborate with other agents to achieve outcomes faster than ever before.”

II. Market Dynamics and Economic Shifts

“In the coming years, certain software vendors and data-platform providers like OpenAI, Anthropic and Databricks* may surpass one of the top three cloud providers in revenue.” — Dharmesh Thakker, General Partner (Bio; LinkedIn)

“These companies democratize access to generative AI models, enabling application development across all cloud providers while simplifying the complexities associated with underlying cloud-service providers (CSPs). There could also be significant developments between cloud services and foundational model providers, depending on the stance the Federal Trade Commission (FTC) takes. Microsoft may deepen its collaboration with OpenAI, AWS with Anthropic and Google could, potentially, acquire Mistral, or the FTC could block all mega-acquisitions and block tight integration between the two sides.”

“We will see a number of high profile “AI” companies that get written up as fraud/go out of business in 2025!” — Mikey Hoeksema, Vice President (Bio; LinkedIn)

“2025 will be the year of identity security, from personal identity impersonation protection to machine identity management.” — Barak Schoster Goihman, Partner (Bio; LinkedIn)

“The growth of AI services and the ease of scaling operations thanks to the cloud services have enabled a growing use of those services on the cyber offensive side. Phishing, social engineering, deepfakes and credential theft attempts are all on the rise. 2025 will be the year when cybersecurity tools protecting from that attack path will meet the early adopters looking to protect their businesses.”

“In 2025, we will witness more tech startups going public in India than in the U.S.” — Sudhee Chilappagari, Vice President (Bio; LinkedIn)

“Several factors are driving this shift. First, India offers a relatively lower threshold for companies to go public, making it easier for emerging startups to take the leap. Second, there’s a burgeoning domestic pool of capital, fueled by approximately 60 million mass affluent Indians and another 30 million non-resident Indians with disposable income. Unlike previous generations, these retail investors are eager to own tech stocks rather than sticking to traditional assets like gold or real estate. Finally, strong foreign investor sentiment toward India's economic growth is bolstering confidence in the country's tech sector. These elements position India as a dominant force in the global IPO landscape for 2025.”

“In 2025, we’ll see the rise of 'Service as a Software' companies, which combine AI and human expertise to deliver fully automated solutions.” — Sudhee Chilappagari, Vice President (Bio; LinkedIn)

“These companies are poised to gain significant traction by providing end-to-end solutions rather than just software workflows. Adoption will start with low-hanging fruit like customer support and IT automation but will quickly expand into more complex domains, such as automating legal workflows (e.g., NDAs, MSAs) and regulatory compliance tasks like audits and tax filings. By addressing enterprise needs for both cost efficiency and contextual expertise, 'Service as a Software' companies are likely to see increasing demand and budgets compared to traditional SaaS solutions.

III. Emerging Technologies and New Frontiers

“AI is unlocking the true potential of real-time data and streaming.” — Danel Dayan, Principal (Bio; LinkedIn)

“While batch processing historically served many enterprise needs (computing, ETL, data processing, etc.), AI applications are both compute and data-intensive in ways traditional systems were not designed to handle. GPUs have addressed the computational constraints for AI applications, but efficient data access for improved training, inference, reasoning, and agentic workflows will require the industry to adopt real-time and streaming infrastructure across the entire stack, from memory chips and real-time data pipelines to dedicated streaming infrastructure.”

“Orbital manufacturing will transition from experimental concepts to tangible applications, driven by advancements in microgravity production.” — Lior Mallul, Vice President (Bio; LinkedIn)

“Companies like Sierra Space, Vast and NASA-backed initiatives are already paving the way, focusing on creating superior semiconductors, pharmaceuticals and optical fibers in space. This shift will mark the beginning of space becoming a viable frontier for industrial innovation, unlocking possibilities that were previously impossible on Earth.”

“In 2025, I predict that the post-production workflows, from analytics to security, will be similarly reshaped by AI.” — Payal Modi, Associate (Bio; LinkedIn)

“AI has started to play a larger role in the software engineer’s day – anywhere from writing code to testing to documenting code. While most of the activity so far has concentrated on the pre-production phase of developing software, there’s an entire workflow post-code deploy that is ripe for disruption.”

*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.

The information contained herein is based solely on the opinions of Dharmesh Thakker, Marcus Ryu, Michael Hoeksema, Jason Mendel, Brandon Gleklen, Danel Dayan, Evan Witte, Jenny Kang, Lior Mallul, Sudhee Chilappagari, Barak Schoster, Bill Binch and Payal Modi, and nothing should be construed as investment advice. This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity.

This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and is for educational purposes.

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